House GOP Members Question CBO's Medicare Scoring

Also take aim at Medicare's innovation center

WASHINGTON -- Republicans on the House Budget Committee used a hearing about how the Congressional Budget Office (CBO) scores Medicare demonstration projects to offer some harsh critiques of the projects themselves, as well as the Medicare division that runs them.

"There have been legitimate questions about the Center for Medicare and Medicaid Innovation's (CMMI) new Medicare and Medicaid payment models," committee chair Tom Price, MD (R-Ga.), an orthopedic surgeon, said at Wednesday's hearing. "Concerns with the adverse impact these experiments might have on the practice of medicine and patient access to critical healthcare treatments; questions about the agency's decision to require mandatory -- rather than the usual voluntary -- participation of healthcare providers in the models; and generally whether the new models exceed CMMI's legal authority."

Mandatory participation is particularly concerning because it "shifts decision-making away from elected officials into the hands of unelected officials" at CMMI, he continued. "No matter which political party controls which branch of government at any given time, such a precedent is unhealthy for our democracy."

Because of these issues, oversight of CMMI is especially important, and yet, "in its own long-term budget outlook, CBO has admitted that it does not know which, if any, of the current demonstration projects CMMI has embarked upon will result in savings," said Price. "It's important that we have the opportunity to question and understand the underlying assumptions and methodology that inform the basis of its analysis."

Rep. John Yarmuth (D-Ky.), one of the committee's more senior Democratic members, disputed Price's contentions. "CMMI is a vital tool for improving quality and containing costs in healthcare," he said. "Healthcare is an evolving, dynamic, and highly technical arena; there has long been widespread agreement on the broad goal of providing higher quality and reducing unnecessary spending. But [doing that] requires giving real flexibility to Medicare and Medicaid ... That's why Congress created the innovation center."

Republicans are contending that CMMI is overstepping its authority, he continued. "If that's what they're contending, I would suggest we have a hearing [on that] ... But this is separate issue from the other stated topic for today: scoring." Noting that some Republicans have proposed defunding CMMI, Yarmuth added, "CBO's estimates are certainly inconvenient for members who want to undermine CMMI ... but it's CBO's job [to make them]. Let's be honest: Republican leadership ignores CBO's scoring when it suits their purposes."

After the opening statements, two-thirds of the 3-hour hearing featured a single witness: CBO deputy director Mark Hadley. Hadley remained unruffled as committee members asked many questions about the specific methodologies used by the agency to come up with its savings estimates for CBO demonstration projects.

"You said that the [durable medical equipment] demonstration project is a notable success [for CMMI]," Price said to Hadley. "But it also led to disruptions in care for seniors, and was associated with increased mortality and an increase in inpatient admissions. Does your model include those parameters?"

"Yes, the overall model looks at overall framework; a requirement is that the center can only expand projects that ... would improve quality without increasing spending, or would decrease spending without harming quality. When we look at specific cases, we would take that [increased hospitalizations] into account."

Republican committee members also expressed concerns about whether CMMI actually generates any savings. "We're now 6 years into [CMMI] 's work," said Rep. Tom McClintock (R-Calif.) "We've appropriated $10 billion; they've spent half of that money and we're not seeing any savings."

Hadley responded that it will take more time for the savings from some demonstration projects to become apparent. "The current estimate from savings we expect to generate from CMMI is $34 billion from 2017 to 2026," he said.

The last hour of the hearing focused on specific demonstration projects, such as the Bundled Payments for Care Improvement project, which pays physicians a single "bundled" rate for care given during a particular surgical episode. Mark Madden, MD, an orthopedic surgeon from Fairfax, Va., explained how his practice was seeing great benefits from participating in the project, including reductions in adverse outcomes and patient satisfaction rates of more than 95%.

However, there are problems with the way CMMI awards bonuses to providers who keep their cost of care below a certain target amount. "Despite achieving CMMI's goals on cost and quality, physician practices are being penalized financially, actually losing money on each episode" because of the way the bonuses are calculated, said Madden. "If doctors and hospitals can't participate, CMMI cannot generate savings."

Joe Antos, PhD, a healthcare policy scholar at the right-leaning American Enterprise Institute who formerly worked at both CBO and the agency that became CMS, pointed out to the panel the CBO's statement in 2015 that it would "account for savings [from projects] CMMI is undertaking or expected to undertake" (his emphasis).

"This remarkable decision to score savings not yet announced is a sharp break from past practice," he said.

Another witness, Topher Spiro, vice president for health policy at the Center for American Progress, a left-leaning think tank here, praised CMMI's work, pointing to the bundled payment program for joint replacement surgery. "I can relay to you a result from one major healthcare system [in New York] -- it boosted the share of patients discharged to home rather than an expensive facility from 30% to about 50%."

Yarmuth urged his committee colleagues to work together to solve any perceived problems with CMMI's activities. "Let's talk together ... and see whether there are reforms in CMMI that are justified."

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